How Has Brexit Affected London House Prices?

I’m feeling old – well I’m 60, moan a lot and have permanent frown lines. Life irritates me. Young people irritate me. Television programmes irritate me. My grandson calls me grumps. Mind you, so does the rest of my family.

But what really gets my goat is that my children, now in their late twenties and early thirties, blame me for Brexit. Yes, just because I voted Out and they voted for Cameron’s dream team (at least, that’s what they led me to believe) I am now persona non grata in my family.

Then, over lunch at my club the other day, my daughter, Sarah, made a startling admission. ‘Tom and I actually voted Out,’ she said, twiddling her wine glass. ‘We thought London house prices would crash if we remained.’

‘Ha! There you go,’ I roared. ‘The Remainers’ warnings of a post-Brexit housing crash-bang-thank-you-ma’am was a load of cobblers. If you listen to the economists, the housing market is now more buoyant than it was before the referendum. Yes, there may have been a slow-down in the family home market and values may drop 5 or 10% over the next six months, but those people who are looking to buy right now have never had it so good, what with the incredibly low mortgage rates.’ I leant back in my chair and took a large sip of wine. I hadn’t felt this good in years.

‘Yeah, right Dad,’ Sarah said, with a glint in her eye. ‘Well, seeing as you’re suddenly a property expert, the floor’s all yours. I’ll polish off my crème brulee, while you tell me exactly how Brexit has affected London house prices. But be quick, I’ve only got 15 minutes or so…’

So, here goes:

A shortage of stock

There aren’t a lot of properties around. Uncertain sellers can’t afford to reduce their prices to make a sale, and buyers are holding back until they see where interest rates are going. Here’s what one house hunter had to say. ‘I viewed a number of properties in London only to be told they’d been snapped up. Wow! In the current market you certainly have to be quick to capture a property. And there I was I thinking that Brexit would have an adverse effect.’

What about renters?

Most of the city’s twenty- and thirty-something renters voted Remain, yet few have decided to fly the nest and relocate. Why? Because demand is holding up, that’s why.

A representative for the National Association of Estate Agents had this to say: ‘International tenants working for multinational companies are requesting options to renew their leases after one year rather than agreeing to a two- or three-year tenancy, as they almost certainly would have done pre-Brexit.’

More rental flats have come onto the market, and numerous clients who were thinking of selling post-Brexit have decided to rent instead – an increase in property values in the next six months or so, is widely expected.

The family home in suburbia

Estate agents are reporting steady sales post-Brexit. ‘Within a few hours of opening our offices after the referendum results, we agreed terms at just below the asking price on a four-bedroom house. In the following week, offers were accepted on seven other properties and five exchanges were recorded on one day alone. And, when a prospective buyer, who works mainly in Europe and was worrying about future job prospects withdrew from buying a flat in the city, another buyer jumped right in and bought it an hour later.’

Money from abroad

Since Brexit, there’s been a significant increase in the number of enquiries from the Far East and other countries. Foreign investors are circling, watching the market carefully, while others are taking advantage of this opportunity.

Property investors from Australia, South Africa and the USA are seeking tax advice in the UK with a view to investing over the next few months. Their focus is on smaller new-build schemes and period conversions in up-and-coming areas of London.

Deluxe developments

Some super deluxe developments are soaring ahead. At £150 million, the conversion of the Grade I listed Admiralty Arch into a residential space with 12 bedrooms, will be London’s most expensive apartment.

But not everything is selling, and developers are having to be open to offers. Investors who bought expensive London off-plan apartments in schemes such as One Blackfriars and Battersea Riverside are now selling for less than they agreed to pay for them. And while the deluxe market was surprisingly quiet immediately after Brexit, confidence is now returning. Many buyers have decided to no longer hold off on their property searches…

‘So there you have it, Sarah. In my humble opinion, the Brexit future for housing prices looks bright. Sarah? Sarah! Have you been listening? Your eyes have been glued to that damned phone for the last five minutes.’

‘Oh, sorry, Dad, I’ve got to rush. Our offer on a gorgeous three-bed Victorian semi has just been accepted. Toodles.’

Article provided by Sara Bryant, an independent content writer working alongside a selection of companies including Brian Gale Surveyors, who were consulted over this post.